The contract with Sanjose Constructora terminated after ADB’s decision

December 12, 2016- Kathmandu

The $92 million Tribhuvan International Airport (TIA) improvement project has been taken off from the Spanish contractor Sanjose Constructora at the end which was finalized after the official termination was done from the ADB headquarters which sent a letter saying so.

The decision which was conveyed by civil Aviation Authority Nepal (CAAN) issued a notice to terminate the contract on Saturday.

The performance bond of Rs. 600 million which is used as insurance to the client for the purpose that if the contractor fails to complete its task and was deposited by the contractor has been apprehended due to the lack of performance it was ought to do under the contract.

The company had already received two deadline extensions but it failed to achieve any of those halting the project. A Caan board of directors meeting last Friday had suggested that the contract with Constructora Sanjose be annulled as the project had attained merely 17 percent physical development in the previous six years of time.

The ADB has given $80 million in credit and allowance and the government has placed up $12 million for the scheme which has since been renamed as the air transport capacity enhancement project. Caan has now decided to summon fresh tenders to recommence the runway extension and terminal building works within one and a half months affected. The TIA improvement project would be fragmented up into four to five packages like runway and taxiway extension, terminal building, soil filling works and so onwards. The soil filling works would be separated into two packages, apron and taxiway, and provided to a local contractor to complete the job.